Independent Banker - January 2025 - 40

COMMUNITY BANK
CEO OUTLOOK
2025
and commercial real estate (CRE) lending were cited as the
revenue streams most likely to drive profitability in 2025,
followed by commercial and industrial (C&I) lending,
residential mortgage lending and agricultural lending.
CEOs view nonlending services like wealth management/
brokerage, credit and debit card services, payment services
and insurance as minor contributors to profitability
in 2025.
CEOs also anticipate loans as the revenue source that
will grow the most in 2025, led by small business, CRE,
residential mortgage and C&I loans. Conversely, just 8%
of respondents said noncore banking activities (such as
subsidiaries, insurance and travel) were the revenue source
that will grow the most.
In some markets, however, loan demand remains
tepid. " If you ask around, everybody's trying to figure
out why there's not a lot of loan demand, " says McComb.
" Smaller community banks are actually taking up the slack
right now because [some have excess] liquidity. Most of
them are at low loan-to-deposit levels, like 60% or 70%.
They have plenty of wood to burn as far as making new
loans. Those with higher loan-to-deposit ratios have had
to pull back [lending to nondeposit clients]. "
The uncertainty surrounding the election also kept a
lot of businesses on the sidelines over the past year or so,
according to McComb.
" Once we have more certainty in the political
environment, " he says, " I think businesses will be looking
to borrow and grow again. "
An overwhelming majority of CEOs (77%) said
their greatest business opportunity in 2025 will be
differentiating their community bank from other financial
services firms in their marketplace.
Deborah Stephenson, president and CEO of
$289 million-asset Brattleboro Savings & Loan in
Brattleboro, Vt., says her bank is the only community
bank left in the county. " We're really going to emphasize
the difference between us and larger regional banks in
our marketing in 2025, " she says. For example, the bank's
marketing will emphasize how deposits are used to help
homebuyers and small businesses in the local community.
Shettlesworth points out the fact that banking is a
More community banks
today are expanding
their product and service
offering to include treasury
management services.
" This is something I've been
interested in offering our
commercial customers for a
while, " says Joe Rottinghaus, president of Conway Bank in
Conway Springs, Kan., " but we waited until we hired the
people who can operate it. The worst thing you can do is flip
the switch and it's a failure. "
Security First Bank of North Dakota in New Salem, N.D.,
plans to offer Positive Pay to business customers in 2025.
" There has been increased interest in Positive Pay due to the
rise in check fraud, " says CEO Sarah Getzlaff. " Several of our
customers have asked about this service. "
Rottinghaus says Conway Bank plans to roll out treasury
management services in early 2025, too. " The more of a
customer's business you have, the less likely they are to
switch banks, " he says. " Offering treasury management is a
key component of becoming a customer's primary bank. "
40 // ICBA Independent Banker // January 2025
Independent Banker - January 2025

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